Bitcoin briefly above $22,500, experts remain wary

Experts caution the unexpected price uptick as a “one-off event” that is most likely a reaction to crypto exchange Binance’s decision to eliminate fees on BTC spot trading and that it in no way signals a price reversal.

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No substantial reason for price surge

Anndy Lian, Chief Digital Advisor to Mongolian Productivity Organization says the sudden price surge in BTC price is unsustainable as there are no good reasons for it.

“The only piece of good news that is closely linked to the surge would be Binance’s zero fees Bitcoin promotion. There were many people who were trying to gain VIP tiers which resulted in a massive transaction volume. That volume can be subjected to wash trading and manipulations,” he says and adds that the incident is one-off.

He adds that investors should “not be fooled” to think that the market has turned bullish.

Liquidation of leveraged short positions

Even as the price of BTC surged despite the lack of any significant announcement, Glassnode’s futures shorts liquidations metric reveals a substantial number of liquidations of leveraged short positions – from $10.23 million to $29.42 million between July 6 and 7, which could have exerted a bullish pressure to propel BTC above $22,500 levels.

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BTC price likely to fall back down

Raj Kapoor, founder, and CEO of India Blockchain Alliance says given the crypto’s history of volatility, this uptick is in no way a long-term reversal and that BTC’s price is likely to fall back down.

“The uptick was accelerated when Binance put on offer zero-fee trading for Bitcoin, with plans to eliminate the charges for more tokens in the future. This was followed up with a stock market rally following the release of the Federal Reserve’s minutes,” Kapoor said.

Experts point out that the crypto market may not have hit the bottom as yet due to fears of intermittent talks of recession, several crypto deals falling apart, surging inflation, geopolitical crises, and rising interest rates, that continue to drive extra short-term volatility in the crypto and stock markets.

Higher currency outflows

Exchange outflows have risen from 20,495 BTC against 18,648 exchange inflows on July 3, while on July 7, it had 50,966 BTC in exchange outflows against 43,601 BTC in exchange inflows, resulting in higher buying pressure.

Notably, most of this volume came from the retail segment.

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Economic downturn priced in

Sharat Chandra Vice President, Research and Strategy, EarthID, says BTC has begun exhibiting decisive price action as investors have priced in the incoming data about an economic downturn.

“Lack of liquidity coupled with lower trading volume accounts for bitcoin’s intraday activity. Bitcoin prices will continue to be volatile depending on the incoming data about the impending recession,” Chandra says.

BTC surge with high volumes increases optimism

Jenny Zheng, NFT Business Development Lead, Bybit says BTC’s hourly chart gives an optimistic outlook and a 4-hour chart suggests a double bottom formation, signaling a bullish price movement ahead.

“The volumes were only on Binance. This is could be because of the removal of Bitcoin spot trading fees on its anniversary. But such action has certainly triggered more buys for Bitcoin on other exchanges too. This is reflected in various communities that I am in,” Zheng says.

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